Saudi Arabia is a prominent country in the Gulf region, which is constantly investing in creating new opportunities for businesses and economic growth. Under Vision 2030, the Saudi government is making constant efforts to support not only local businesses but also to attract foreign investors, especially visionary entrepreneurs. Besides the government support, its advantageous location with convenient access to the main markets in the GCC and the Middle East makes business setup in Saudi Arabia a profitable investment.
Whether you own a large business or are planning to launch your startup in KSA, Express Business Service promises expert support for everything. With us as your reliable partner, you don’t need to get troubled with the hassles, like obtaining approvals, complex paperwork, and other steps. Our team, with years of experience, handles anything for our valued clients, helping them build their own business empire in KSA.
If you’re planning to expand or start your business in Saudi Arabia, you need to be aware of the different entity types. Express Business Service helps you select the right business structure based on your needs and goals. You just need to share details regarding your investment goals, operations, and others, and our team will help you choose the right entity type.
Limited Liability Company (LLC)
If you’re a foreign investor, this type is the best choice, as it promises complete foreign ownership. Moreover, it provides limited liability for owners, allowing both local and partners to run a business with a flexible structure.
Joint Stock Company (JSC)
This type of business entity is ideal for large businesses or those planning to raise capital through public or private shareholders. It is usually preferred by businesses engaged in the finance sector.
Branch of a Foreign Company
If you own a foreign company, you can easily expand your operations in the Saudi market with this entity type. You don’t need to form a new legal entity, as the branch will conduct business in the regional market while remaining a legal part of the parent company.
Sole Proprietorship
Partnership Firms
Representative Office
Holding Company
Why Start A Business In Saudi Arabia?
You can start a business in Saudi Arabia to secure the benefits of diverse growth opportunities. The government is making constant efforts to create better and more lucrative opportunities that not only attract more businesses but also promote economic growth. With Express Business Service, as your trusted partner for business setup in KSA, you can secure several benefits, including:
- Economic Advantages : KSA is shifting its economic dependence from the oil sector by creating opportunities in several other sectors, including technology, tourism, and others, under Vision 2030. This not only benefits businesses but also aligns with the country’s goal for strong and stable economic growth. Moreover, its central position in the Middle East region offers convenient access to several prominent global markets.
- Business-Friendly Environment : Besides creating new opportunities, the government has introduced several policies and made changes in the rules to make business setup in Saudi Arabia easier for foreign investors. The process for company registration in KSA is now easier, as several steps can be completed online. Additionally, several sectors offer full ownership benefits to foreign business owners without a local partner.
- Incentives and Infrastructure : You can secure the benefits of low tax rates with a business setup in KSA. In some cases, businesses may pay 0% corporate and withholding taxes for specific periods. If you need an affordable entry in the Saudi market, you can establish a business setup in SEZs that offer additional benefits like customs and compliance advantages. Moreover, the advanced infrastructure can also support your business growth.
- Market & Workforce : If you start a business in Saudi Arabia, you can secure reach to a large consumer base of over 35 million people. A large portion of the country’s population is under 25 with specialized expertise. So, you don’t need to worry about finding the right talent for your business.
Step-by-Step Business Setup Process in Saudi Arabia
With Express Business Service, you don’t need to deal with the complex business setup process in KSA. Our professionals are experts in offering customized business setup support to businesses of all sizes and from diverse sectors.
The first thing that you need to do when starting a business in Saudi Arabia is to create a strong legal foundation. Only then can your company officially conduct operations in the country. The five main steps involved in this step are:
- Obtain MISA Investor License: Foreign investors need to secure a MISA investor license, which offers one year of validity to legally invest and operate in KSA. Only after securing this approval can you proceed with the other steps in the setup process.
- Company Name Reservation: Next, you need to choose a unique business name and register it with the authorities. You must think of at least three unique names; in case the name is already used, the setup process will be delayed. Once your business name is secured approval no other business can use it.
- Draft Local Articles of Association (AoA): You need to prepare the AOA that clearly explains your business’s structure, rules, roles of shareholders, and operational details. You need to officially register it to get approval for the next step.
- Commercial Registration (CR): You need to register your business and secure a CR, which confirms that your business has legal recognition in KSA. You can’t access banking services and sign contracts without it.
- Chamber of Commerce (CoC) Registration: The final thing to do in the first step is to register with CoC. This will offer you legal access to take part in commercial activities in the country. Also, it shows your operations are always compliant with regional regulations.
After you’re done with all the steps to establish a legal foundation for your business in KSA, the next step is to register with other authorities to show compliance with labor, tax, and other obligations. Only after completing the six steps in this step can you proceed further, like hiring employees.
- Get a Company Seal: You need to secure a company seal, which is an official stamp. This is used on legal documents, contracts, and agreements. Only after obtaining it can you proceed with other registrations.
- Register with the Ministry of Labor (MoL): If you don’t register with MoL, you can hire employees legally in KSA. After registration is done, you can apply for work permits and visas, hire employees, as it shows your business is compliant with regional labor laws and rules.
- Register with the General Organization for Social Insurance (GOSI): You need to register the hired employees with GOSI to make sure they are covered under social insurance programs. This not only protects your staff, but also your business from legal issues in case of work-related issues.
- Register a National Address: Without a physical office and its address registered in the national database, you will not be able to secure permits and licenses.
- Issue a General Manager (GM) Visa: This is required for the appointed manager to work legally in the country. Once it is secure, the GM can handle operations, open bank accounts, and manage other operations of a foreign-managed business.
- Registration with the General Authority of Zakat and Tax (GAZT) and VAT Registration: By registering your business with GAZT, you can show its compliance with tax laws, including VAT. However, you only need to register for VAT if your revenue exceeds the eligibility limit.
The final stage of establishing a business setup in KSA involves steps that are required for activating your company and completing all operational requirements. It involves setting up digital accounts, banking, and other steps that are:
- Activate the Chamber of Commerce (CoC) Account: Without activating the CoC account, you can’t manage its official commercial activities. Also, this account is needed for several other legal procedures.
- Obtain Health Insurance: Next, you need to secure health insurance covering medical expenses for your GM and employees. This ensures your compliance with Saudi rules, and also, this is required to be provided before finalizing the Iqama.
- Get a Medical Check-up: Your GM needs to get a complete medical check-up in KSA. You need to submit the medical report for issuing the GM’s Iqama.
- Issue the GM’s Iqama: This must be secured, as without it, the GM of a foreign-managed company can’t legally live and work in Saudi Arabia.
- Register with the Muqeem Portal: You need to register on this portal to smoothly handle visa and residency permits applications and renewals online.
- Register with the Absher Portal: This e-services platform offers several services for both businesses and their staff. The registration with it is a mandatory compliance requirement.
- Register with the Qiwa Portal: This offers special services for SMEs. After registering on this portal, you can easily manage work permits, contracts, and other labor-related services.
- Register with the Mudad Portal: This registration is required for managing necessary municipal services for your business. It shows your business is compliant with local inspection, permit, and other requirements.
- Open a Bank Account: Next, you need to open a corporate bank account under your business name to manage business transactions. You can only use this account to receive payments from clients, pay salaries to staff, and manage other transactions.
- Harmonization of Operations: The final step in the process of business setup in KSA is to make sure you’ve secured all required licenses, approvals, and are registered with the relevant authorities. This confirms that your business is fully compliant and ready to conduct legal operations.
Required Documents for Business Setup in KSA
If you’re not aware of the required documents for a business setup in KSA, no worries, as Express Business Service can help. We help you prepare all the documents needed for legal registrations, securing licenses, and meeting compliance with local rules. With the right paperwork, you don’t need to face any issues or delays in the setup process.
- Passport copies of all shareholders, directors, and company managers.
- Proof of residential address and bank reference letters.
- Board resolution and Power of Attorney for foreign branch operations.
- AoA and MoA.
- Trade name approval certificate issued by the authorities.
- Lease agreement or Ejari registration for the office space.
- Notarized and attested documents (if necessary).
- Incorporation documents of the parent company (for foreign branches).
- Certificates of good standing for international companies.
- Employment contracts are required for visa processing.
- Licenses for any regulated business activities, if applicable.
Business Setup Scenarios for Foreign Companies in KSA
If you’re a foreign business owner or investor, you must be aware of the four ways available for you to start a business in Saudi Arabia. Each of these scenarios involved different processes, and their approval timeline also varies.
What You Need to Expand Your Company in Saudi Arabia
You need to understand that the requirements for expanding a business for startups and established businesses are different in Saudi Arabia. With Express Business Service, you’ll get expert help with detailed planning, and we make sure you’re always compliant with local laws.
For Established Businesses
- Attested & Notarized Documents :- All the company documents, including CR, MoA, and AoA, need to be verified by MOFA and the Saudi Embassy.
- Minimum Years of Operation: The business must be actively operating in its home country for at least 1-2 years.
- Financial Stability: You need to prove your company’s financial stability by submitting audited financial records and statements for the last 1-2 years.
For Startups
- Attested & Notarized Documents: Similar to established businesses, startup owners need to get their company documents verified by MOFA and the Saudi Embassy.
- Support Documents: You need to submit a letter of intent, a brief overview of your startup and its operations, and a pitch deck. Based on these support documents, the authority understands your business idea and its potential.
- Endorsement Letter: Lastly, you need to get a support letter from a verified venture capital firm or licensed incubator. This will show your business idea is credible, increasing the chance of securing approval.
Different Types of Business Licenses in Saudi Arabia
All businesses in Saudi Arabia need to obtain the required business license to start legal operations in the country. Experts at Express Business Service can help you choose and secure the right license based on your company structure and operations.
- Commercial License: If you offer services related to trading, you need this license. This allows businesses to legally buy, sell, and trade goods within the country.
- Professional License: Those who are engaged in consultancy, IT, legal services, and other professional fields need this license to comply with their sector-specific regulations.
- Industrial License: It is needed by businesses that are involved in manufacturing, production, and industrial operations, as it confirms that you meet necessary safety and environmental standards.
- Tourism License: Several businesses operating in the Saudi hospitality sector, including hotels, travel agencies, and tour operators. It shows the company provides legal services that meet the required hospitality regulations.
- Healthcare/Education/Contracting Licenses: If you operate in any of these sectors, you need to secure specific approvals to meet the required compliance rules.
- Mining, Real Estate, Agricultural Licenses: If your company is involved in mining and agricultural operations and offers real estate services, you need to obtain these licenses.
- E-commerce License: This is required to be obtained by companies that operate online stores or offer digital services. This license shows your online business operations are compliant with e-commerce regulations.
Legal & Compliance Requirements in Saudi Arabia
Whether you’re a local or foreign investor, when establishing a business setup in Saudi Arabia, you need to follow the country’s legal and compliance framework. These regulations not only protect your business from legal issues and hefty penalties but also help you operate smoothly.
Saudization (Nitaqat System)
Private sector companies must hire Saudi nationals per industry quotas. Non-compliance affects licenses and visas. Qiwa helps calculate Saudization quotas and obtain compliance certificates.
Tax Compliance
All businesses must comply with the rules set by ZATCA, including VAT registration and filing, corporate income tax, withholding tax, and others.
Labor Laws
Business owners need to follow strict rules related to employment contracts, working hours, leave allowance, termination procedures, and end-of-service benefits for employees.
Annual Compliance
You must renew necessary licenses annually on time to avoid penalties. Moreover, regular and timely tax filings are also necessary.
Intellectual Property
You must register your trademark, patents, and digital assets with the relevant authorities to protect them through strict Saudi IP laws.
Data Protection
If you’re working in fintech, telecom, and healthcare sectors, you need to comply with required data protection and cybersecurity requirements.
Saudi Free Zones & Special Economic Zones
Saudi Free Zones or SEZs are special zones that offer unique benefits to businesses established there. From less stricter regulations and compliance requirements to world-class facilities, these zones offer several advantages. Those looking for an affordable entry into the Saudi market can secure expert support for free zone business setup in KSA from Express Business Service. These zones are significantly contributing to shifting the country’s economic reliance from the oil sector to other sectors.
Benefits
Tax Exemptions
Businesses operating in these zones are provided with full exemptions on taxes, including corporate income tax, withholding tax, and VAT for eligible goods and services traded within the zone.
Relaxed Ownership Rules
The most special benefit of operating in SEZ is that foreign businesses secure full ownership benefits, without a local partner. However, if they operate in other parts of a country, a local partner is needed.
Custom Incentives
Businesses can benefit from duty-free imports of goods and equipment with simple customs clearance. This only makes supply chain management faster and easier, but also cost-effective.
Key Economic Zones in Saudi Arabia
One thing that must be noted is that all SEZ in KSA offer unique infrastructure facilities and provide special incentives for different sectors. So, you should review the rules, facilities, benefits, and other requirements before choosing the special zone.
NEOM
King Abdullah Economic City
KAEC has a favorable location on the Red Sea coast. This zone offers special services for logistics, automotive, and pharma manufacturing, residential development businesses. With its own seaport and rail links.
Jazan
Ras Al Khair
This SEZ is considered a powerhouse for the maritime industry of the country. It supports businesses involved in shipbuilding, oil rig maintenance, and related industries. Being home to the largest shipyard in the Middle East.
Cost of Business Setup in Saudi Arabia
The cost to establish a business setup in Saudi Arabia varies for all companies. For a business opening a branch office of its foreign company, the setup cost will be different from a startup owner. You can contact Express Business Service to secure expert support for careful financial planning. We can help you with a rough estimate of the necessary initial expenses for securing licenses, legal registrations, renting office space, service charges, and others.
- MISA License Fees (SAR 10,000 – 15,000):- These fees cover government approval for foreign investors to operate legally.
- Commercial Registration Fees (SAR 1,200 – 2,000):- Required to obtain your official company registration certificate.
- Chamber of Commerce (SAR 2,000 – 10,000):- Ensures business membership for legal recognition and trade support.
- Office Lease & Ejari (Varies by location):- Necessary for securing a registered physical office space.
- Professional Fees (SAR 10,000 – 20,000 Annually):- Paid to PRO/GRO for handling government formalities.
- Estimated Total Setup Cost (SAR 40,000 – 150,000):- Varies by business type, sector, and chosen entity.
- Other Costs:- Includes verification, attestation, and visa issuance for employees.
Top 10 Profitable Business Ideas in Saudi Arabia
Car Rental Business
Starting a car rental business in KSA is profitable, as car rentals are very high due to millions of visitors. Besides the tourism sector growth, the residents also rely on private transport for daily commute, especially in major cities, like Riyadh, Jeddah, and Dammam.
Daycare Business
Women in Saudi Arabia are joining the workforce, which has increased the demand for reliable childcare services. You can start a daycare business in urban areas within the country to offer services to families. Moreover, the government also supports businesses offering services for working parents with incentives.
Carwash Business
You can provide a carwash service business, as their demand is very high due to the hot and dusty climate in KSA. Moreover, you don’t need a large investment to start this business, and it promises consistent income.
Transport Business
You can start a transport company in Saudi Arabia, offering services for both moving goods and for daily commuting. The government is actively investing in infrastructure growth so that businesses in this sector can be supported.
Taxi Business
Again, the high demand for private vehicles for daily commuting by residents and short-distance travel by visitors makes a taxi business profitable. You can start a company in holy cities within the country, as the demand is highest there.
Gold Business
If you’re already into the gold business, then establishing jewelry stores and offering gold-related trading services can be highly profitable. The stable market offers more growth opportunities with the least risk of losses.
Food Truck Business
This is a great option for anyone looking for an affordable entry into the Saudi market, as the street food culture is growing among the youth and expats in KSA.
Clothing Business
KSA also offers great opportunities to clothing businesses. If you want an affordable entry in this sector, you can start with an online clothing store.
Laundry Business
Residents with busy lifestyles are opting for laundry services. So, you can set up a laundry business and secure loyal customers with pickup and delivery services.
Restaurant Business
Although the street food culture is rising in Saudi Arabia, the demand for high-end dining experiences is also increasing, especially due to the growth of the tourism sector.
Benefits Of Starting A Business In Saudi Arabia
Not only for foreign investors and large business owners, KSA is becoming a preferred destination for business setup and entry in the Middle Eastern markets for startups also. From business-friendly policy changes to diversifying the economy, several reasons make starting a business in the country a profitable investment.
- Strategic Geographic Location: Its advantageous location at the crossroads of three key continents, Asia, Africa, and Europe, promises easy access to not only regional but also global markets.
- Government Support & Vision 2030: The Saudi government is supporting both local and foreign investors by introducing friendly policies, lucrative initiatives, and special programs under Vision 2030.
- Strong Economic Growth: Among all the countries in the Middle East, KSA offers long-term opportunities for businesses, as it is shifting its dependence from the oil sector to the non-oil sectors.
- Tax & Regulatory Advantages: Businesses can secure a simplified setup procedure, low taxes, and other benefits in special economic zones. Moreover, certain SEZs offer a low offer 0% tax rate for a specific period.
- Access to Skilled & Young Workforce: More than half the residents in the country are 35, so businesses are provided access to a strong workforce. Also, the government is investing in training programs to upskill Saudis.
- Ease of Business Setup: The recent changes in business setup rules have made it easier for businesses to secure the required approvals and registrations.
- Growing Consumer Market: If you’re looking for a market with an increasing population of wealthy consumers, KSA is a great option. The rising incomes and changing lifestyles are increasing the demand for better and new products and services.
- Access to Investment Incentives: SEZs and free zones in KSA offer several benefits, including customs exemptions, full ownership, and others.
- Infrastructure & Technology: The country is home to many world-class airports, seaports, and industrial zones. Moreover, the government is investing in digital transformation and the development of smart cities.
- Legal & Political Stability: The country offers a safe and secure business environment with its clear laws and political stability.
- Sectoral Opportunities: From IT and healthcare to tourism and renewable energy, each sector offers special opportunities, and the wide range of choices makes starting a business in Saudi Arabia profitable.
Ongoing Corporate Services by Express Business Service
With several compliance and legal requirements, you might think starting a business in Saudi Arabia is complex. Well, if you’re not aware of all the necessary steps and don’t ensure compliance with required regulations, it can be really challenging. However, with Express Business Service, as your trusted partner for business setup in KSA, you don’t need to worry about anything. Whether you need help with renewals or approvals, we can help with anything. Here is how we help our valued clients:
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PRO & GRO Services for Government Approvals
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Annual License & CR Renewal
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Office Space & Ejari Support
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Business Advisory & Expansion Services
From visas to official clearances, we manage paperwork and also handle communication with government departments. You don’t need to worry about any mistakes that can delay the setup or approval process.
We help our clients with the timely renewal of their business license and commercial registration. You don’t need to pay penalties, as we make sure you are always compliant with all regulations.
We also support our clients in finding and securing registration of suitable office space. Our Ejari registration support services make sure you easily handle the rental lease registration and renewal.
Why Choose Express Business Service for Business Setup?
Express Business Service promises expert and customized services for clients from diverse countries and industries. We have been offering support to our valued clients in building their own business empires for several years. Our team is well-versed in all local obligations and the simple and complex setup process. Whether you’re a startup or a large business owner, we offer compliant services, making sure you only need to focus on your growth and not on paperwork and other legal tasks.
- Experienced team with in-depth local knowledge.
- Complete and customized business setup solutions.
- Fast handling of government approvals.
- Support for license renewals and compliance.
- Guidance on business expansion and market growth strategies.
Frequently Asked Questions & Answers
Businesses that want to start a business in Saudi Arabia can choose the right entity from several available options, including LLC, Joint Stock Company, branch of a foreign company, and others.
The approval and business setup process varies based on company type. If you’re establishing a startup, it takes around 19 days. However, for basic entities, advanced, and full establishments, it could take 21 days, 59 days, and 64 days, respectively.
Depending on your sector and business activity, you need to obtain a required license, like pharma companies need to secure a healthcare license and taxi businesses tourism license.
Generally, businesses need to prepare passports, proof of address, AOA, lease agreement, trade name approval, and other verified documents for company registration in Saudi Arabia.
Securing a license, legal approvals, understanding and managing compliance with necessary rules, tax compliance, and understanding labor laws are some challenges in the setup process in KSA.
MISA license, CR fees, Chamber of Commerce, office lease & Ejari, PRO/GRO professional fees, notarization, and visa processing are the main costs involved in the business setup, which vary for different businesses and sectors.
SEZs in KSA offer tax exemptions, full foreign ownership benefits, simplified procedures, and other advantages to attract investors.
Businesses in any sector in KSA need to make sure on-time renewals of legal approvals, licenses, CR, and Ejari contracts. With the support of a reliable provider of business setup services, businesses can always maintain compliance without issues.
You must follow Saudization guidelines, tax rules set by different authorities, and other sector-specific regulatory requirements.
Saudi Arabia is continuously developing under the Vision 2030 plan, as the government is actively investing in creating new opportunities for businesses and economic growth.
